OSRECOVERY, INC. v. ONE GROUPE INTERNATIONAL

The opinion of the court was delivered by: Lewis A. Kaplan, District Judge

ORDER

Defendant Randy L. Johnson, Jr., moves for reconsideration of the Court's holding that Johnson waived his privilege against self-incrimination with regard to matters relevant to an affidavit that he submitted. See OSRecovery, Inc. v. One Groupe Int'l, 02 Civ. 8993 (LAK), 2003 WL 21057996, at *3-*6 (S.D.N.Y. May 12, 2003). He argues that the Court overlooked controlling legal authority establishing that the finding of such a waiver based on the submission of the affidavit, made in support of his claim of privilege, is fundamentally unfair "because it penalizes Johnson's attempt to assert his Fifth Amendment privilege." "Alternatively, Johnson requests that the Court strike and disregard his affidavit and decide the motion to compel without it." Def. Mem. 1.

Motions for reconsideration are confined to raising "matters or controlling decisions which counsel believes the court has overlooked." S.D.N.Y. Civ.R. 6.3. "The fact that [a party] disagrees with the Court's ruling does not justify a motion for reconsideration, which must be limited to matters that were before the Court and overlooked." Faulkner v. National Geographic Soc'y, 220 F. Supp.2d 237, 238 (S.D.N.Y. 2002).

Insofar as Johnson argues that he submitted his affidavit for the purpose of establishing his Fifth Amendment privilege, the Court considered and rejected this argument. Johnson's legal argument in the present motion rests in large part on a First Circuit case, United States v. Doe, 628 F.2d 694 (1st Cir. 1980), which he did not cite previously and which is not controlling in any event.*fn1 Def. Mem. 2. Thus, there is no basis for granting a motion for reconsideration.

In any case, even if this were a proper motion for reconsideration, the Court would reject Johnson's argument on the merits. In this case, unlike in Doe and Branker, the defendant did not need his own testimony to establish that he no longer was an employee or agent of the defendant entities. He had other options, such as adducing evidence from persons with knowledge of his alleged termination of his relationships with the entities in question. In consequence, this was not a circumstance in which Johnson was put to a Hobson's choice of sacrificing one constitutional right by failing to submit an affidavit necessary to an effort to vindicate that right or sacrificing his Fifth Amendment right by submitting the affidavit. In this case, he could have protected both by presenting other evidence regarding his corporate affiliations. He instead voluntarily chose to submit the affidavit in question, and he did so without even attempting to reserve his rights. Doe and Branker therefore have no proper bearing here, as both were cases in which the witness could not meaningfully advance his constitutional claim without offering his own testimony.

Finally, even if the Court agreed with Johnson and granted his request to strike his affidavit and to decide plaintiffs' motion without it, Johnson would not prevail on the current record with respect to two of the three entities mentioned in his affidavit.

As Johnson concedes, it is his burden to justify his asserted privilege against self-incrimination. Def. Mem. 4. In this context, that means that his assertion of the privilege fails except to the extent that he established that he no longer is affiliated in any relevant way with ECurrency Exchange, ECommerce Exchange, and One Groupe International. The evidence he relies upon, if the affidavit were put aside, however, would be insufficient to sustain that burden except possibly with respect to ECurrency Exchange.

The only evidence relied upon by Johnson to support his contention that he terminated his relationship with One Groupe International is a purported e-mail or other electronic exchange between co-defendant Reed and another person, dated July 12, 2002 and included in one of plaintiff's earlier court submissions. The e-mail, however, does not do the trick. It states:

"OneGroup 7/12/200 4:01 PM . . . What is this I hear
about Randy formally resigning from OneGroup?

"Lucki 7/12/200 4:02 PM No, he told me that he had
unofficially resigned but that he would be available
if we needed a server rebooted or anything.

"OneGroup 7/12/200 4:02 PM and he told sandi that he
had been `officially' advised to do so.

"Lucki 7/12/200 4:02 PM He went to see a lawyer I
understand.

"OneGroup 7/12/200 4:03 PM OK"

Thus, the communication, even putting aside the authenticity and hearsay aspects, suggests that Johnson had been advised by counsel to resign, that he had done so "informally" but would still be involved to some extent, and that he had not resigned "formally" or "officially." This is not satisfactory proof that Johnson terminated his connection with One Groupe to an extent sufficient to warrant a conclusion that Johnson no longer is an agent of the corporation and therefore is entitled to the protection of the act of production doctrine with respect to any One Groupe documents in his possession, custody or control.

Likewise, in seeking to distance himself from ECommerce Exchange, Johnson relies solely on an unsworn representation in a letter from its counsel to the effect that Johnson sold his ten percent share in that company prior to January 2, 2003. The Court declines to credit such a representation for this important purpose in circumstances in which ECommerce Exchange is a co-defendant and documentary proof of such a sale should have been available readily. In any case, proof of a sale of Johnson's interest would not demonstrate that he no longer is an agent of the company.

In sum, Johnson's motion for reconsideration is denied in all respects.

SO ...

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